- I paid on it for at least 3 to 4 years.
- It was reported as a "closed account" instead of paid off in good standing.
- I called the creditor and customer service ultimately send me a letter stating that I paid off my car not with zero payments missed.
- Why doesn't the credit bureau take that into consideration?
Your account is closed that's not an error, typically a car loan would show paid-in-full, but closed means the same thing and does not impact your credit score differently.
Paying off a car loan typically has a minor negative impact on credit score because it affects multiple categories used in common scoring models. It affects your credit mix, credit utilization, and credit history (average account age, oldest account).
Here are a handful of articles that go into more detail about credit scoring and impact of paying off a car loan:
Nerdwallet - Does Paying Off My Car Loan Early Hurt My Credit?
CarsDirect - Will My Credit Score Go Up After I Pay Off My Car?
The bureaus DO take it into consideration, once they have all the data. Sometimes the lender doesn't report the payoff status right away, but it will get resolved. Give it time. I went through the same thing with a personal loan with Navy Federal I paid off. They reported it "closed" but didn't update the status that it was a payoff for about two weeks. In the meantime, the bureaus know your loan was paid off by virtue of the fact it would have been closed with a zero remaining balance. It isn't quite time to panic! (smile)